Pay just a tap with an app

Sarah Whyte

HOW would you like to pay for that? Not so long ago, this question had two answers: cash or card. Not any more.

Customers can now ''check in'' on a mobile app with facial recognition, tap their credit-card enabled phone, or hover their credit card over a scanner.

And as companies compete to win the point-of-sale battle, payment innovations will move consumers further away from the worlds of cash and plastic and onto mobile payments. With 64 per cent of Australians owning smartphones, analysts predict the mobile payment industry will be worth almost $50 billion worldwide by 2014.

The newest competitor in the mobile payment battlefield is PayPal, which is predicted to earn $10 billion in global mobile transactions this year alone.

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Late last year, the online payment giant's first in-store payment app was activated.

Customers who have a PayPal account can ''check in'' to the store they are visiting, order their bread, coffee or cinnamon roll at the counter and then pay on their PayPal app via a few taps on their phone.

But the transaction does not stop there. When the customer checks in to the store, the retail worker can see their customer's face on a screen and their full purchase history.

This kind of ''intelligence'' will help shopkeepers know their customers before they even walk into their shop, PayPal spokesman Adrian Christie said. He said there were ''at least 20'' retailers, including cafes and fashion stores, using the PayPal app, which he referred to as a ''digital wallet''.

One of these companies is the Sonoma bakery chain, which has six stores in Sydney. Owner Andrew Connole, who implemented the mobile technology recently, was not put off by the 1.5 per cent charge to businesses for each transaction that uses the technology. It was the app's convenience and being able to ''understand his customers' buying mentality'' that attracted him.

''At the end of the day, it's a faster transaction,'' he said.

The manager of the Sonoma store in Alexandria, Stefan Villalobos, hopes that when regular customers check in to the store, he will be able to make their regular coffee before they reach the counter. He said the process of ordering and paying with a credit card can take three to four minutes, whereas the mobile app payment was instantaneous. ''We're a counter-style service cafe, so people have to line up and are interested in paying quicker.''

But PayPal is not alone in implementing innovative ways for customers to pay. In August, MasterCard and Westpac started the first trial of their mobile technology called ''tap and go''. Customers can wave the back of their mobile phone (fitted with a SIM card that contains their credit-card details) over a scanner that operates as a ''virtual debit card''.

MasterCard is preparing for a world without cash or plastic, said Matt Barr, head of marketing and innovation. ''The credit and debit card as we know it may well disappear, but the account itself will remain or become a digital account.''

Australian telcos are also in on the game. Technology enabling customers to pay for goods by swiping their mobile phones or tablets at the checkout is expected to become widespread.